Crypto spring? Crypto spring? Crypto spring?

Crypto spring?

Cryptocurrencies 5 minutes to read
Jacob Pouncey

Cryptocurrency analyst, Saxo Bank

Summary:  A short squeeze in Bitcoin and Ethereum prices has led to a 21% in gain the entire cryptocurrency market capitalisation with most of the spike occurring in a two-hour window on April 2.


This week the entire crypto market cap rose by 21%, thereby bringing the market cap to just under $175 billion. Bitcoin and Ethereum rose by 22% and 19% respectively. Most of the rally happened on April 2 in a two-hour window, with Bitcoin smashing through previous resistance levels.

Some are calling for the end of the bear market while others are calling it a false breakout. Whatever it is, the fact remains that Bitcoin has posted its first two consecutive months of gains since late 2017.

BTC whale makes waves

Many believe that the recent price increase in BTC was due to algorithmic buy orders across several exchanges to the tune of $100 million. These buy orders quickly cleared through the order books and squeezed margin traders who were short Bitcoin.

Over $500m in shorts were liquidated on Bitmex over the last 48 hours. Since the OTC markets have maintained volume over the previous several months, some speculate that large traders who have built up substantial positions over the past several months with little slippage are now looking to increase their holdings through buying on the spot exchange and creating slippage to the upside.

Binance is rumoured to add margin trading 

A look at the API of the largest cryptocurrency exchanges Binance suggests that it will begin to allow margin trading on its platform. If Binance were to implement this, it would mean that a majority of the top 10 cryptocurrency exchanges offer leverage. The others who do not offer margin are all under US jurisdiction.

The introduction of margin trading on the platform will undoubtedly benefit the revenue stream of Binance and their proprietary token BNB. Binance has promised to use 20% of its quarterly profits to buy back outstanding BNB tokens until half the supply is gone. This mechanism acts as a dividend to all remaining holders of BNB.

GBP stable coin on the way

The Andreessen Horowitz-backed startup TrustToken recently launched a stable coin backed 1:1 by the British pound. TrueGBP trades under the ticker TGBP on several OTC trading desks, and the firm is working on getting the Ethereum based token to trade on several spot exchanges.

This stable coin now gives GBP owners the ability to hedge their cryptocurrency exposure in GBP and vice versa. This stable coin could be an interesting bellwether for capital flight from the UK to the cryptocurrency market, as funds are held in escrow in US accounts.
Disclaimer

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-hk/legal/disclaimer/saxo-disclaimer)

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-hk/about-us/awards.

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc. Android is a trademark of Google Inc.